Informal Organizational Structure
The Hawthorne Studies

The big contribution of the late 19th century to organizations
was the notion of rationality. The essence of what Weber, Fayol,
Taylor and all those other classical theorists were saying was
try to organize in a rational manner. Rather than make your
brother vice-president of finance, put in somebody is qualified
to do the job. Instead of moving pig-iron the traditional way,
work out the bio-mechanics of it and develop a work style that
maximizes output.

A part of this rationalist perspective was a simple
motivational theory, based ultimately on Adam Smith and
utilitarianism. The idea is that people work best when they are
maximizing self interest. Which was interpreted to mean money.

But there is more to formal organizations than
purely formal behavior, and more to human motivation than just
pay. Human beings are social animals. We need to hang around with
others. We like to be liked by others. We don't like to be the
person that nobody likes. We also like respect and power and
autonomy. So there are other needs that workers need to fill
besides the ones that money buys.

Whenever a set of people gets together and
starts interacting on a long term basis, they start to form an informal
group. An informal group is more than just a collection of
people. Groups have internal social structure based on dominance
and friendship relations. There are social leaders. There are
hangers-on.

Organizations contain lots of informal groups.
Their existence -- and importance -- really came to light in the
1920's and '30s at the Hawthorne plant of the Western Electric
Company in Chicago, studied by Elton Mayo, Roethlisberger and
Dickson, from MIT.

They started out studying ways of improving
worker productivity, partly in the tradition of Taylor, and
partly as a reaction to Taylor because one effect of
Taylorization was tremendous morale problems among workers. Their
experiments were in 3 phases, called the illumination, relay
assembly, and bank wiring room studies respectively.

Illumination

The first experiments were with illumination -
lighting in the factory. It was thought that workers might work
better when there was more light, but light was very expensive,
so they needed to find the optimum level to satisfy both
requirements.

They assigned workers making induction coils to
2 groups: test and control. Both started with same amount of
light. Then the Test group was given more light. Productivity
went up. But, unfortunately, it also went up in the control
group. So then they increased the light in the Test group again.
Once again, productivity went up or stayed the same in both
groups. Again they raised the light level, and again the same
result.

So then they reduced the lighting in the Test
group way down, below the level in control group.
Productivity soared in the Test group, and continued to go up in
the control group. They reduced light some more: same result.
They finally got down to a level of light equivalent to a
moonlight night, and found that productivity was still the same
or higher. This really confused the researchers.

They finally took two workers and put them in a
closet with no light at all -- just the crack under the door.
Productivity was just fine.

They had to conclude that light didn't seem to
matter in the way they expected. And there was something very
strange about why output kept going up relative to the rest of
the factory. So they planned a more elaborate experiment.

Relay Assembly Test Room

The second experiment was the relay assembly
test room. Six women who assembled telephone relay switches were
taken out of the main area and placed in special test room where
they could be observed. All immigrants (as were most factory
workers).

It was a 5 year experiment. Productivity was
measured the whole time by a machine that counted the number of
relays that each person assembled as she dropped it down a little
chute. They gauged the effects of rest pauses, shorter work days,
shorter work weeks, wage incentives and different supervisory
practices on output.

The results were just like the results of the
lighting experiment. No matter what change they introduced, it
always seemed to either have no effect, or it improved
productivity, even when the change was just returning the
variable to its original state!

As a result of these two studies, the Hawthorne
team theorized that there was a key variable that managers had
been ignoring, which had to do with workers' relationships,
attitudes, feelings, and perceptions. By separating people into
groups and then making lots of changes in working conditions, the
researchers inadvertently did two things:

Made workers feel like management actually cared about
them. They felt important and special.

They created bonds among people in the test and control
groups -- in effect turning them into true groups as
described above. People work better when they are part of
a clear social structure.

So an important conclusion was that people did
not necessarily behave according to models of economic
rationality. Social processes within the group that formed were
much more important than purely material gains. Also, even
material goods or physical events or wages or workhours etc were
perceived differently by different people in different situations
and so its not so much the money or the hours themselves that
matter, its what meaning they hold for people, and meaning is
something that is socially mediated. The group affects how the
individual interprets things.

An example occurs in the next phase of the
experiments, the bank wiring room, where it turned out that
workers conferred a lot of meaning on which chair people occupied
(front or back of room). The front of the room was higher status.
This was not something that management was even aware of. But it
affected relationships among people in the room.

To really understand employee grievances,
complaints, squabbles requires understanding employee's position
in the group social structure. Employee complaints are
subjective: can't be treated as objective facts. Often, they are
symptoms of other problems like personal or social disorders.

For example, suppose a worker refuses to be
moved to another desk, claiming that the light isn't as good and
it smells there. But its really that that area is where the
people of the out-group sit, and she's a member of the in-group.
and she would rather die than sit with the out-group. If
management isn't aware of this, they will simply think she is
irrational.

The meaning and value that employee assigns to
his or her position depends on the degree to which position
permits him to fulfill his social obligations to others in the
group. A social organization provides a system of values that
provide basis of action and satisfaction.

Bank Wiring Room

The third phase of the experiments was designed
to investigate the social structure of employees. How did it
form, what did it consist of, how did it affect productivity, and
so on.

The room contained 9 wiremen, 3 soldermen, 2
inspectors, and the observer. Each solderman serviced 3 wiremen.
wiremen attached wires to panels in a particular order, and
soldermen soldered the connections closed. Then the inspectors
would test them electrically with some test equipment. Also,
among the 9 wiremen, 3 worked only on selectors and the other 6
worked on connectors. The connector stations were located in the
front of the room.

A basic question asked was, is the informal
social structure based on occupations? The answer was
"somewhat".

For example, connector wiremen were all
together at front of room. The men said they preferred connectors
to selectors. Supposedly they were lighter to carry but they only
had to carry two of them each day, so that sounded like an
excuse). It also happened that new men were typically added to
back of room. New men were slow, and had low hourly rates. People
in front were old hands, more proficient, and therefore more
status. So people preferred connectors cuz that's what the more
prestigious people were doing.

It was found that wiremen had higher prestige
than soldermen. New people started as soldermen then became
wiremen. Evidence for prestige was in things like who had to get
lunch for everyone, some fights over the windows, and bits of
conversation.

Another job was trucker: he brought wire and
raw materials into the room each day and took away finished
terminals. For each terminal who took away, he had to put on an
id tag and a stamp. The men called him "goofy" and
"gigolo" and would annoy him constantly: spitting on
the terminals right where he had to pick them up, jogging his arm
just as he was putting on stamp, holding on to the handtruck,
tickling him when his hands were full etc.

When a new trucker came on, they behaved the
same way towards him. Note that it was not exactly in the company
manual that wiremen should harrass truckers. It was just
something that developed.

The inspectors reported through a different
branch of the organization. They were better educated and wore
nicer clothes. In the Bank Wiring room, they were higher status
for most things, but considered outsiders. They did not have
lunch with others and had no control over windows. Again, it was
obviously not something management had mandated.

One of main things going on in the room was
games: matching coins, lagging coins, shooting craps, card games,
bets on combinations of digits in the serial numbers of weekly
pay checks, pools on horseracing, baseball, quality records. Also
chipped in to buy candy, and they practiced binging (punching
each other in the arm), and they did a special kind of arguing
that was like a white version of playing the dozens: they would
insult each other until somebody got mad. Whoever got mad lost.
The games went on basically within two groups: a front-of-room
group and a back-of-room group.

Other things going on where conflicts over the
windows: should they be shut or open? In-group members could
control the windows.

There was also job trading and helping each
other out. A guy labeled w3 by the researchers was the most
popular guy. He was also one of the fastest workers and didn't
really need any help, but everybody wanted to help him. He didn't
reciprocate much but that didn't matter.

As in all groups, there were longterm
friendships and antagonisms, whose effects come out practically
every day. In general, the wiremen were antagonistic to the
inspectors and vice-versa. But the men particularly hated I3, and
eventually ousted him. In contrast, they liked I1. I1 would point
out errors without charging them. The men also hated W5 for
squealing on them.

In the end, most of the relationships came down
to two cliques, each with a hanger-on, and some isolates. The
groups included several different professions. They seemed based
more on physical closeness than anything else. These groups were
recognized by the men themselves. They developed ideas about each
other. In private interviews would say things like "we talk
about interesting things, those guys in the back just horse
around."

The basic determinants of clique membership:

not a rate-buster: don't work too much

not a chiseler: don't work too little

not a squealer: don't let supervisor know
anything that could possibly be used against operators

not officious: don't act like an inspector

Clique membership/ostracism acted as a form of
social control, forcing people to conform to group desires.
Membership was also used to manage bosses. The men in a group
would all stick together on stories, and would fudge reports so
as to achieve uniform results. They also covered for each other.

The groups established norms regarding output,
treatment of supervisor, reciprocity and other interpersonal
relations. effective controls and sanctions. But the main thing
of course was to keep piece-rates from changing. By having group
cohesion, they could resist change.

The cliques served as a system for sense-making
about organizational events. They developed their own set of
beliefs, explaining things to each other like the complicated
western electric payment system (which they had completely
wrong). Consequently, employee logic didn't always agree with
management or rational logic: eg. they restricted their output
even though it cost them money.

The investigators found that tests of
intelligence, manual dexterity, physical health were unrelated to
productivity. This means that social factors like norms of
productivity overwhelmed any differences in ability among the
workers.

It should be noted that the social organization
of the room had elements of the official structure (like
relations between soldermen and wiremen), but also had entirely
foreign elements.

- Overall conclusion: formal organizations are
not really formal. when human beings interact with each other
over a long period of time, they develop a social structure that
is only partly based on the formal organizational structure.

Summary

Formal orgs develop informal groups within
them. These informal groups have well-developed social
structures, histories, culture etc. Group structure and
processes serves specific purposes of controlling
members, and of protecting group from management.

The informal social structure has as much
to do with the way the organization runs as does the
formal structure. The informal social structure may or
may not work to the detriment of the organization. It is
safe to say, thought, that it is always in mgmt's
interest to understand that social structure, both so
that they can predict how workers will react to things,
and to manipulate them

Organizations serve several functions.

provide society with
products/services

provide employment - money for its
members

provide a framework for a social
system. just like shipwrecks and coral reefs
create habitats for millions of fishy creatures,
organizations provide social habitats for people.